2011 (5) TMI 751 - AT - Central Excise

Exemption under Notification No.223/88 - concessional rate of duty in respect of 'forgings and forged articles of steel other than stainless steel - department was of the view that the respondent are not eligible for this exemption, as forgings are of alloy steel not of steel - Held that - in the case of Mukundbhai D.Rathod (2002 - TMI - 106974 - CEGAT, MUMBAI - Central Excise), wherein it has been held that the definition of 'steel' under Chapter 72 of the CETA being wide enough to include the articles of various kinds of steel including the stainless steel and other alloy steel, benefit of exemption under Notification 223/88 would be available to the article of alloy steel. Though the notification during the period of dispute excluded the forgings/forged articles of stainless steel from its purview, the forgings/forged articles of 'other alloy steel' would be covered by this exemption notification, Revenue's appeal is dismissed

Summary

Issues:
1. Eligibility for exemption under Notification No.223/88 for forgings and forged articles of alloy steel.
2. Interpretation of the term 'steel' under Chapter 72 of the Central Excise Tariff Act, 1985.

Issue 1:
The case involved a dispute regarding the eligibility of the respondent for exemption under Notification No.223/88 for forgings and forged articles of alloy steel. The respondent claimed the exemption, but the department denied it, asserting that the forgings were of alloy steel, not steel. The Additional Commissioner confirmed a duty demand and imposed a penalty. However, on appeal to the Commissioner (Appeals), the Order-in-Original was set aside. The Revenue then filed an appeal against this decision. The argument presented was that the forgings in question were of alloy steel, not steel, and therefore, the exemption was not applicable. The contention was based on the definitions of 'steel', 'stainless steel', and 'other alloy steel' under Chapter 72 of the Act. The Tribunal examined the submissions and the impugned order-in-appeal, which relied on a previous judgment establishing that forgings of 'other alloy steel' were covered by the exemption notification. As the forgings in question were not of stainless steel, the Tribunal upheld the decision of the Commissioner (Appeals) and dismissed the Revenue's appeal.

Issue 2:
The second issue revolved around the interpretation of the term 'steel' under Chapter 72 of the Central Excise Tariff Act, 1985. The Tribunal referenced a previous judgment that clarified the wide definition of 'steel' to include various types, such as stainless steel and other alloy steel. It was established that while the notification excluded forgings of stainless steel, forgings of 'other alloy steel' fell within the ambit of the exemption. The Tribunal found no fault in the impugned order-in-appeal, as the forgings under consideration were not of stainless steel. Therefore, the interpretation of 'steel' encompassed forgings of alloy steel, making the respondent eligible for the exemption under Notification No.223/88. The Tribunal dismissed the Revenue's appeal based on this interpretation and precedent.